Botswana Insurance : BIHL GROUP INTEGRATED ANNUAL REPORT 2023

INTEGRATED ANNUAL REPORT 2023

IMPROVING LIVELIHOODS

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2

CONTENTS

Key achievements in 2023	3
About this report	4

6	ABOUT
BIHL
Group structure	7
Our purpose	10
How and where we operate	11
Timeline		12
Our market and trends	13

14	HOW WE
CREATE VALUE
Our material matters	15
Our strategy for the next five years	16
Our value-creating business model	17
Our risks and opportunities	19

38	ENVIRONMENTAL,
SOCIAL AND CORPORATE
	GOVERNANCE

Our long-term sustainability	39
Supporting small and medium enterprises	40
Driving financial inclusion	41
How we care for the environment	42
Developing our people	44
Awards and recognition	45
BIHL in action	46
Corporate governance overview	54
Our board of directors	64
Our management team	67
King IV™ application register	69
Audit and risk committee report	73
Activities of the other board committees	75

205	INFORMATIONSHAREHOLDER
Shareholder analysis	206
Notice of annual general meeting	207
Form of proxy	209
Notes to the form of proxy	210
Definitions		211
Shareholders' diary	213
Dividend distribution	213
Corporate information	213

Engaging with our stakeholders

21

24	PERFORMANCE
AND OUTLOOK
Financial review	25
Chairman's message	28
Chief Executive Officer's report	29
Chief Financial Officer's report	32
Group equity value	34

76	ANNUAL
FINANCIAL
	STATEMENTS

Directors' report	77
Statement of responsibility of the board of directors	78
Report of the Statutory Actuary	78
Independent auditor's report	81
Statements of financial position	85
Statements of profit or loss	87
Statements of comprehensive income	89
Statements of cash flows	89
Statements of changes in equity	90
Basis of preparation and accounting policies	92
Notes to the financial statements	132

BIHL INTEGRATED ANNUAL REPORT 2023

3

KEY ACHIEVEMENTS IN 2023

REVENUE

EARNINGS

ASSETS UNDER MANAGEMENT (AUM)

GROUP

EQUITY

VALUE

DIVIDENDS

Net insurance service result

é 3% to P286 million

Operating profit

é 257% to P801 million

é 16% to P44 billion

 7% to P5,38 billion

(December 2022: P5,76 billion)

Paid as dividends during the year

P754 million

(December 2022: P402 million)

Investment	Revenue from contracts
service result	with customers

>100%	é
14% to
é	P296 million
to P315 million
Core	Share of profit
earnings	of associates
é
195% to	64% to
P873 million	P79 million

SOLVENCY

Return on group equity value

 8,3%

(December 2022: 16,9%)

Made up of:
Interim dividend	P218 million
Final dividend	P285 million
Special dividend	P251 million

Value of new business

 12% to P140 million

Profit attributable to equity holders

é 74% to P774 million

Business is well capitalised; required capital for the group is covered

7 times

(December 2022: 7,7 times)

Final dividend proposed not subject to tax

P313 million

(December 2022: P285 million)

BIHL INTEGRATED ANNUAL REPORT 2023

4

ABOUT THIS REPORT

REPORTING SCOPE AND BOUNDARY

This is the integrated annual report of Botswana Insurance Holdings Limited (BIHL Group) for the year ended 31 December 2023.

This report includes material information for our stakeholders about our financial, economic, social and environmental performance and demonstrates our performance against our previously stated plans.

The content encompasses all divisions and subsidiaries of the company across all regions of operation in Botswana and our associates in various sub-Saharan countries.

We provide insights into matters of importance to our stakeholders, highlighting how the organisation is governed, the material matters we identified and the risks and opportunities that could impact our business. We show how these factors influence our business model, strategic objectives and future plans in creating and sustaining value for our stakeholders in the short, medium and long term.

REPORTING PRINCIPLES AND FRAMEWORK

We applied international and Botswana reporting guidelines and best practices in compiling the report, including the following:

• Botswana Stock Exchange (BSE) Listings Requirements
• International Financial Reporting Standards (IFRS)
• Botswana Institute of Chartered Accountants Financial Reporting Guides
• King IV Report on Corporate Governance for South Africa, 2016™ (King IVTM)
• International Integrated Reporting Framework ( Framework) of the IFRS Foundation
• United Nations Sustainable Development Goals (SDGs), and
• Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)

as well as the relevant regulations and directives in force under the laws of Botswana.

The annual financial statements on pages 85 to 204 are presented in Pula, the group's presentation currency.

MATERIALITY

This report discloses BIHL's approach to sustainability and identifies and explains the material environmental, social and corporate governance (ESG) issues facing the group. The board has considered matters viewed as material to the business of the BIHL Group and its stakeholders. These are determined through board discussion, market research, stakeholder engagement, continuous risk assessments and the review of prevailing trends in our industry and the global economy. Sustainability issues that are not considered material to our business are not discussed. This approach should enable stakeholders to accurately evaluate the BIHL Group's ability to create and sustain value over the short, medium and long term. Management is not aware of the unavailability of any reliable information or any legal prohibitions to disclosing any material information.

Refer to page 15 for more information on our material matters.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that, unless otherwise indicated, reflect the company's expectations as at 31 December 2023. Actual results may differ materially from these expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate. The company cannot guarantee that any forward-looking statement will materialise, and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. The company disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available as a result of future events or for any other reason, unless required to do so by legislation and regulation. The external auditor and assurance providers have not assured these statements.

FEEDBACK

A hard copy of this integrated annual report is available on request as well as online at https://www.bihl.co.bw/investor-relations-pages

We are committed to improving this report each year and appreciate and encourage constructive feedback. Please forward comments to [e-mail]

CORPORATE INFORMATION

Contact details for BIHL are set out on the back cover.

THEME: IMPROVING LIVELIHOODS

This is our purpose statement and the essence of everything we do as a business. We enhance the overall well-being and quality of life of individuals and communities we operate in. We intend to develop strategies, initiatives and interventions that enhance income opportunities, access to financial services and socio-economic conditions for people, thereby enabling them to lead healthier, more productive and fulfilling lives.

Read more about our purpose on page 10.

NAVIGATION

This integrated annual report was enhanced with digital navigation capabilities to assist you in moving between sections. You can do so by using the navigation icons at the top of the page or where you see one of these links:

Refers you to information available online at www.bihl.co.bw

Refers you to a page where more information can be found in this report.

REPORTING SUITE

The following reports provide more information on BIHL's 2023 performance and are available online at www.bihl.co.bw

PRELIMINARY UNAUDITED

GROUP RESULTS

for the year ended 31 December 2023

Year-end results	Year-end results
announcement	presentation

BIHL INTEGRATED ANNUAL REPORT 2023

5

ABOUT THIS REPORT continued

ASSURANCE

BIHL has a combined assurance model, which is set out below.

Business process		Nature of assurance		Assurance provider
Annual financial statements		External audit		PricewaterhouseCoopers
Internal control processes		Internal audit services		Internal audit services with the
				assistance of Sanlam Group Internal
				Audit
BSE Listings Requirements		Compliance reviews		BSE and PricewaterhouseCoopers
Insurance due diligence		Independent risk reviews		PricewaterhouseCoopers,
				independent actuary and reinsurers

Per Botswana law and the BSE Listings Requirements, BIHL's annual financial statements were audited by our independent auditor, PricewaterhouseCoopers.

  The unqualified independent auditor's report is set out on pages 81 to 84. The scope of the audit is limited to the annual financial statements on pages 85 to 204.

APPROVAL

The audit and risk committee and the board acknowledge their responsibility to ensure the integrity of this report, which was reviewed by the audit and risk committee, the board, the Company Secretary and Statutory Actuary.

The board, after consultation with the audit and risk committee, concluded that this integrated annual report is presented materially in accordance with the Framework and approved it for publication on 14 June 2024.

Dr Keith Jefferis	Catherine Lesetedi	Kudakwashe Mukushi
Chairman	Group Chief Executive Offiicer (CEO)	Group Chief Financial Officer (CFO)
Andrew Cartwright	Robert Dommisse	Edwin Elias
John Hinchliffe	Kate Maphage	Lieutenant General Tebogo Masire
Mustafa Sachak	Nigel Suliaman	Kobus Vlok

Signatures were removed for security and privacy reasons.

BIHL INTEGRATED ANNUAL REPORT 2023

ABOUT BIHL

Dreams

are not driven by he, she or we, they are driven by US.

It takes a single step to start the journey, but many people to get you there. No matter how bold or big your dream, you will always need the support of others.

IMPROVING LIVELIHOODS

7	ABOUT BIHL

GROUP STRUCTURE

The BIHL Group is a leading BSE-listed financial services group with a proud record of achievements. We are the holding company of two subsidiaries and have invested in various associates.

Botswana Life

Insurance Limited

Botswana's leading life insurer with a market share estimated at over 71%. Botswana Life administers close to

300 000 policies and underwrites over

P1,9 billion in recurring premium income.

Botswana Insurance Fund Management Limited

A pioneer in asset management managing in excess of P36 billion in assets across equity, fixed income, real estate, liquidity and alternative investments.

Associates and joint ventures

50,00%

33,00%

27,61%

25,10%

Bifm associates

50,00%

49,00%

BIFM CEE

25,10%

BIHL top shareholders

SanlamAllianz

57,92%

Botswana Public Officers Pension Fund

11,89%

Motor Vehicle Accident Fund

4,00%

Other

26,19%

BIHL INTEGRATED ANNUAL REPORT 2023

8	ABOUT BIHL

GROUP STRUCTURE continued

CORE VALUES

Care

Innovation

Integrity

Collaboration

CORE BUSINESSES

Life insurance

Asset management

Short-term insurance

Value-added services

INVESTMENT CASE

Key player in the	Financial business	Strong group liquidity	High-quality and
Botswana financial	with diverse revenue	and balance sheet	competent management
markets	streams	position	and staff

Technical institutional	Track record of	Diverse and	Strong partnerships
memory embedded in	compelling product	client-centric	and networks across
the leadership team	offering across Botswana		different industries

Responsible and	Strong and trusted	Satisfactory growth	Innovative product
efficient capital	brand identity	track record	development team
allocation

BIHL INTEGRATED ANNUAL REPORT 2023

9	ABOUT BIHL

OUR PARENT JUST GOT BIGGER

On 5 September 2023, Sanlam, the largest non-banking financial services company in Africa and our majority shareholder, and Allianz, one of the world's leading insurers and asset managers with more than a century of history in Africa, joined forces to create the largest pan-Africannon-banking financial services entity on the continent.

SanlamAllianz covers 27 countries in Africa across various lines of business, with positions strengthened in 12 overlapping countries. As SanlamAllianz, it operates among the top three insurance companies in most of its chosen markets through a shared-value approach with its staff, clients, the markets, communities and economies it does business in, as well as its business partners and shareholders. Its ambition is to maintain this position in all its operating markets and to continue to provide its clients with world-class products and services.

Its key focus areas are to:

• Drive financial inclusion by providing greater access to its products and services through digital innovation, as well as leveraging its telecommunication and bancassurance partnerships across our markets to create new opportunities
  in Africa
• Provide the best of two leading international brands with improved multinational offerings in both short-termand life insurance through innovation and the additional capabilities enabled thanks to greater economies of scale
• Improve and optimise its reinsurance offering
• Grow its life and general insurance business through product and service innovation
• Be the reference insurer for clients due to its strong commitment to client satisfaction and through pursuing opportunities in terms of its asset management business, based on market maturity.

SanlamAllianz's purpose is to empower generations to be financially confident, secure and prosperous. This is powered by its vision to distinguish itself as the most admired financial services group in Africa and an attitude of excellence in delivery as it implements its strategy of building scale and achieving sustainable growth.

It is part of a company that demonstrates lasting commitment to all stakeholders - internally and externally - by making a long-term investment in the African market.

Projecting benefits such as enhanced economies of scale, a diverse product offering and a greater market share, SanlamAllianz is positioned to play a pivotal role in Africa's sustainability by advancing financial inclusion, innovative products and sound governance.

This historic union not only symbolises the future of financial services in Africa but also strengthens the position of BIHL Group on the continent.

Heinie Werth, CEO of SanlamAllianz, during a celebratory event hosted by the BIHL Group in Gaborone, underscored the enduring partnership BIHL and Sanlam have fostered over the last two decades.

BIHL is historically, culturally and philosophically in tune with SanlamAllianz's purpose.

Toasting SanlamAllianz are Gaffar Hassam (SanlamAllianz Executive: Brand, Strategy and Corporate Affairs), BIHL directors Robert Dommisse, Catherine Lesetedi (Group CEO), Neo Bogatsu (Botswana Life Executive Director - Retail) and Dr Keith Jefferis (Chairman) with Heinie Werth (SanlamAllianz CEO).

BIHL INTEGRATED ANNUAL REPORT 2023

10	ABOUT BIHL

OUR PURPOSE

We are focused on our purpose of improving livelihoods. We have a clear strategy to achieve our vision and mission through our strategic objectives. We strive to meet these objectives by leveraging our strong values.

VISION	PURPOSE	MISSION
We will achieve our vision
To be the financial services	Improving
providing innovative wealth
customers and to deliver
provider of choice for our		through service excellence,
shareholders	livelihoods	and insurance products
values every day
best-in-class returns for our		and living our stated core

OUR VALUES

CARE	INNOVATION	INTEGRITY	COLLABORATION
Service with empathy	Always striving for continuous	Unwavering in our pursuit	Unlocking our winning as one
and consideration, knowing	improvement to create value	to do the right thing, resolute	spirit by focusing on a better
everything we do leaves a lasting	for our stakeholders,	in our commitment to what	outcome for all, achieved through
impact and legacy	our society and the world	is good for all stakeholders	partnership and an open-minded
			approach to everything

HOW WE IMPROVE LIVELIHOODS

Taking a long-term view on financial well-being

FINANCIAL PROTECTION

Safeguarding loved ones in the event of death, maintaining their standard of living

WEALTH GENERATION

Access to financial investments, enabling capital appreciation clients to support the development of intergenerational wealth and goal achievement

PEACE OF MIND

Risk transfer alleviates worries about how

families will cope financially in the provider's absence

DEBT SETTLEMENT

Avoiding the possibility of burdening families with any outstanding debts

INCOME GENERATION

Premium cash backs create income streams to supplement earnings

BIHL INTEGRATED ANNUAL REPORT 2023